The Evolution of Microfinance in India: A Comparative Assessment of UPA and NDA Governance (2004-2024)

Abstract

This study compares microfinance sector growth under India's UPA and NDA administrations, examining budget allocations, spending, and policy shifts. The analysis reveals significantly higher loan disbursements under the NDA, with 4.8 times more loans overall and an average annual growth rate of 328.1%, compared to 19.2% under the UPA. The NDA period showed greater fluctuations in loan disbursements, suggesting policy shifts and aggressive lending practices. The research explores microfinance's historical development in India, its role in financial inclusion, and economic impact. It also addresses challenges like high-interest rates and regulatory issues. The findings illuminate how political administrations and policies influence the microfinance sector, affecting financial inclusion and economic development in India. This comparative analysis contributes to understanding the interplay between government policies and microfinance growth.